Exxon’s has supported carbon pricing — at least theoretically — by donating $1 million to Americans for Carbon Dividends,the political action committee of the Climate Leadership Council (CLC).

This It begs the question: what impact for Exxon, the world’s largest oil company?

Exxon owns or has a financial interest in65 million tonnes per year of LNG liquefaction capacity. That’s about 18% of the LNG industry’s worldwide capacity of 369 million tonnes.

Regasified and combusted, those 65 million tonnes of LNG can generate the equivalent of about 940 million megawatt-hours (or 940 Twh) of electricity, or about four percent of global electricity consumption.

Those 65 million tonnes of LNG also will create 9.4 million tonnes of life-cycle carbon emissions based upon 0.65-0.7 tonnes of carbon emissions per mwh generated, using figures from the US Department of Energy. That’s about two percent of global emissions.

LNG Life Cycle Greenhouse Gas Emissions

The US Department of Energy estimates life-cycle emissions of natural gas shipped to
market as LNG as only marginally lower than coal.Source: “Life Cycle Greenhouse Gas Perspective On Exporting Liquefied
Natural Gas From the United States, 2014,” US Department of Energy

If recouped downstream from electricity consumers, a $40 carbon levy on LNG-produced electricity would add 3c/kwh to Japanese and South Korean electricity prices, 4c to German ones and 1c to those in China and India.

Price Effects On Electricity of a $40 Carbon Price

In the developed import economies of Europe, Japan, the UK, South Korea and Australia (which is considering, crazily enough, exporting LNG intra-country to itself — but that’s another story!), It would raise electricity prices by 13-15%.

In China, South Korea and India, the effect of $40 carbon prices would raise electricity prices 15-20%.

Such levies also would provide cost-effective funding of virtually all forms of low emission energy production short of carbon capture and storage, far and away the highest-cost carbon emission reduction technology there is.

Exxon, of course, may just be paying lip service to carbon taxes because it faces potential existential damage from climate lawsuits in the future. Or it may be seeking to soften up public opinion before cutting a deal to free itself from decades of future litigation due to its history as a major legacy carbon emitter and long-time global warming disinformation vector.

A new and contrite Exxon, however, looks an odd fit — at least right now. Over time, it will take a lot of convincing of the public that the company truly has changed.

As a short-lived Secretary of State under Donald Trump, former Exxon Rex Tillerson made reasonable statements about climate change. But Tillerson also made other statements casting doubt on it, leaving his real views unclear.

Exxon itself, of course, has a history of misleading the public on climate change, academics claim. It’s corporate history also suggests, at best, a tin ear or blind eye. The example below is a beauty.

In 1962, Exxon’s predecessor Humble Oil bragged in full page advertisement in Life Magazine about its energy’s ability to melt glaciers.

Glacier Melting our Specialty!

In 1962, Exxon precursor Humble Oil took out a two-page advertisement in Life Magazine bragging about
melting glaciersSource: Think Progress

Despite all the above, Exxon may be spurring important debate. That’s to be welcomed. And it’s a good first step.

A good second step would be to make donations to climate change research organizations and activists going forward commensurate with its past expenditures on sowing doubt on global warming.

It also creates a gusher of money for recycling into the global economy. This can pay for new technology and upgraded infrastructure, as well as to reducing government debt, meeting the rising costs of aging populations and funding better education and health care.

All of those, in turn, will generate their own positive externalities over time. In short, forcing dramatic change in the fossil fuel industry through proper taxation is highly profitable over the short-, medium and long term. Best of all the biggest elephant in the industry, Exxon, agrees.

Over the short term, higher carbon prices reduce negative behavior. This includes unfettered use of high emission energy.

Over the medium term, higher carbon prices will lead to more economic activity as the carbon tax funds are invested in new and societally beneficial growth industries rather than being sucked up by fossil fuel industry rent seeking.

Over the long term, the investments will generate ever larger environmental, social and economic dividends as their benefits compound.

Therefore, instead of seeing climate change as a problem, climate change needs to be seen (correctly) as the mother of all opportunities to change a pile of bad habits and make the world a much better place.

The above will be self-evidently obvious to all but those in the fossil fuel industry.

In the United States, profligate fiscal policy (including heaps of unwarranted subsidies to oil, gas and coal) are swelling the US debt-to-GDP ratio toward 100%.

This is occurring as an aging population is putting strain on medical facilities, while underfunded Social Security will go broke. Who comes first: fossil fuel interests, or people?

Carbon prices can help solve the problem, with money left over for investment in new technologies that in turn spur their own economic growth.

These result: the the next batch of Microsofts, Amazons, Apples and Googles. These will enrich investors.

With this amazing cornucopia of benefits, it often becomes hard to understand why there even exists opposition to higher carbon pricing. The only beneficiaries of the status quo are fossil fuel companies.

Another benefit of using carbon pricing to reduce emissions is that it helps the insurance industry. The increasing pace of climate disasters is costing the industry immensely.

If it keeps up, it will strain social stability.

Natural disasters made 2017 a year of record insurance losses.Source: Munich Re

The first is a cleansing financial crisis sometime before 2030. The second is destructive civilizational breakdown sometime around 2040.

The reason? LNG’s ‘life-cycle’ emissions are only slightly less than coal. The LNG industry needs to be forced into transparency on the issue.

To avoid catastrophic global warming, the world must to move quickly to low emission energy.

That means reducing the carbon emissions per megawatt-hour (for instance) from 0.8-0.9 tonnes per megawatt-hour (coal) to below 0.4 (ie wind and solar).

LNG lies in the ‘simply not good enough’ middle at 0.6-0.8+.

LNG Life Cycle Greenhouse Gas Emissions

The US Department of Energy estimates life-cycle emissions of natural gas shipped to market as LNG as only marginally lower than coal.Source: “Life Cycle Greenhouse Gas Perspective On Exporting Liquefied Natural Gas From the United States, 2014,” US Department of Energy

Further, LNG requires hundreds of billions of dollars of environmentally damaging infrastructure that’s only economic with long-term lock in. And that’s what the industry has done — to the detriment of everyone.

To avoid this train wreck, Liquid Natural Gas’ life-cycle carbon emissions need to be disclosed, priced and levied. That way they will compete on a level playing field against renewable energy and storage.

The first step along this path is proper carbon pricing.

Carbon Prices Needed for A Sustainable Future

Weighted global carbon prices linger around $1.3 per tonne. Traded prices range from around $3 to $20. European reforms aim for $20+ by 2020. Experts estimate $40 now and $100+ later are what’s needed.
Sources: High-Level Commission on Carbon Prices, US General Accounting Office, Exxon, Baker-Shultz Carbon Tax plan, International Energy Agency, state of California, European Union Emissions Trading Scheme.

At present, traded prices languish below $20 per tonne and some below $10. Major reforms are planned for 2020 and beyond. At the high end, the High-Level Commission on Carbon Prices argues $100 carbon is needed by the early 2020s. The US General Accounting agrees on the $100 figure, but around 2030. Even Exxon uses hypothetical future prices of $80.

Such prices need to be ‘fitted’ to historical price data and incorporated into future price expectations.

Using Henry Hub natural gas price data from 1997, and applying nominal $5 carbon prices to that, rising at 5% per year to $40 now (the social cost) and rising to $70 by 2050 (an unambitious number), it indicates a future cost of ~$5 per mwh by 2033 at a time when wind and solar are falling steeply and by then will be cheaper.

And what all that points to is increasing uncompetitiveness for LNG with its high sunk costs. The solution is for these companies to go bankrupt due to their bad bets. Their shareholders can take the hit. That’s market economics.

This will limit the broader damage to society, since shareholders were willing participants in a losing industry. The other alternative is to spread the losses widely through an aggressive expansion of the LNG industry. But that disproportionately favors LNG industry insiders to the detriment of everyone else.

Effect of Rising Carbon Prices on Natural Gas Trade

Applying $5 per tonne carbon prices rising at 5% per year to Henry Hub natural gas prices provides a clearer picture of the true environmental economics of the international Liquid Natural gas trade as carbon prices move to $70 and above by the late 2020s. As LNG becomes priced out of the market, collected carbon levies can fund investment in clean energy.Sources: Henry Hub Prices, US Energy Information Administration;“Renewable Power Generation Costs 2017’” International Renewable Energy Agency

Looking at forward forecasts by companies like Shell, they see a broad expansion of the LNG industry out to 2050, with generally flat natural gas prices untroubled by carbon pricing.

But if this expansion of the LNG industry occurs, it will almost certainly put the world on the path toward 4c temperature rise.

Stated conversely, if the world limits warming to 2c amid an uncontrolled expansion of LNG with all adjustment forced on to other industries

Emission Adjustment Burden On Other Industries to 2030 Of LNG Expansion

If global Liquid Natural Gas (LNG) trade expands in line with industry forecasts at the same time as the world drastically reduces carbon emissions, the LNG trade will account for roughly 30% of global emissions by by 2030.

The first: carbon pricing spurs a financial crisis as huge investments in LNG are prematurely written off. That outcome will mostly affect reckless shareholders in LNG companies. Broader society may largely dodge the bullet.

The good news in this scenario is that clean energy alternatives will be fully competitive by 2030 (likely earlier). What this means is huge writeoffs for exposed industries and their bankers but sparing the larger economy.

The second: uncontrolled global warming that spurs civilizational chaos. The only winners will be the rich and well-connected. Everyone else will have to fend for themselves.

Both outcomes are bad. But the better outcome of the two is a financial crisis caused by carbon pricing. That will cause premature write down of huge LNG capacity, but the effects should be limited to the corporate sector.

Allow strategic bankruptcy and wipe out of shareholders will limit the broader damage to society. Shareholders should have known better.’

When these are taken into account, LNG’s life-cycleenvironmental economics are worse than those of coal.

Unchecked, uncounted and unpriced, these emissions distort global energy markets so badly they’ll ensure uncontrolled climate change. The only way to fix this is to properly count and price these emissions.

Doing so reveals LNG’s true economic folly.

It will also ringfence value destruction by limiting it to feckless investors rather than society at large. The reason: LNG industryinvestors should have known this or should have asked — or worse — knew it, asked about it and then ignored it.

Below we make the case against LNG’s environmental economics through citing readily-verifiable, publicly-available sources.What they indicate is end-to-end carbon emissions from the global LNG trade are far worse than industry officials disclose.

For years, the half-truth spouted by the natural gas industry — and you still see it repeated virtually verbatim everywhere —is that Liquid Natural Gas is a critical transition technology to a clean energy future because natural gas is a low emission fuel.

That’s a lie atop a half-truth.

When combusted to make electricity, natural gas emits (estimates vary, but not by much) about 0.4 tonnes of carbon dioxide (and equivalents) per megawatt-hour of electricity produced.

Coal, by contrast, emits anywhere from about 0.65-1.1 tonnes per megawatt-hour, depending on the coal.

What these LNG figures artfully leave out are the sizable emissions in the LNG production and delivery chain.

These include emissions from extracting the natural gas from wells in the first place (including methane emissions, which aren’t counted), pipelining the natural gas to coastal ports, liquefying it into LNG, ocean shipping, regasification, pipeline delivery to power plants andthencombustion for electricity.

When these are added in — as they should be — the emissions of natural gas shipped to market as LNG to create electricity generates greenhouse gas emissions of around 600-700 kgs of carbon per megawatt hour. Natural gas all by itself emits about 400.Coal emits 800 or more.

That makes LNG only slightly better than coal in terms of carbon emissions at huge investment and environmental cost.

Below we present charts of LNG’s life-cycle emissions from different sources. We then combine these into a summary chart.

When this emissions difference is counted and priced, LNG’s environmental economics disappear. The upshot: investors have been suckered, markets distorted, the environment degraded and huge costs shoved on to future generations.

That’s hardly the definition of a clean transition fuel.

Below is a chart from the US Department of Energy (DOE). In a 2014 report, the DOE estimated LNG’s life-cycle carbon emissions of 600-800 kilograms of carbon per megawatt hour of electricity produced.

Source: “Life Cycle Greenhouse Gas Perspective On Exporting Liquefied Natural Gas From the United States, 2014,” US Department of Energy

That’s 50-100% higher than the 400 kilos of carbon emissions the LNG industry likes to use. The industry does thisby counting only the downstream combustion of natural gas. It simply excludes the upstream emissions of mining, compressing and uncompressing and transporting.

For comparison in the chart above, we added solar energy’s 40 kilograms (yes 40) of carbon on a comparable life-cycle basis, and wind’s tiny 12. These are an order of magnitude lower than natural gas, and 1.5 orders of magnitude lower than the life-cycle emissions of Liquid Natural Gas.

These are not one-off figures. They permeate research on the subject across the board. Take the US Office of Fossil Energy. It came up with life-cycle emissions of natural gas shipped to market as LNG of 630 kg/Mwh.

LNG Life Cycle Greenhouse Gas Emissions

Life-Cycle carbon emissions of 600-700 kgs per mwh result from natural gas electricity delivered to market as LNG.

Peer-reviewed research published in the journal Environmental Science and Engineering also has similar figures

LNG Life Cycle Greenhouse Gas Emissions

Research at Carnegie Mellon University came up with LNG emissions of nearly 900 kilograms of carbon per megawatt-hour. This research included the effect of uncounted methane emissions of LNG and their dramatic shorter-term global warming impact.

The Liquid Natural Gas industry lobby the International Gas Union sees things differently, standing alone in estimating the life-cycle emissions of LNG as much lower than anyone else.

LNG Life Cycle Greenhouse Gas Emissions

The International Gas Union claims LNG has only emissions of .6-.6 tonnes mwj. far belwo other estimates.

An outlier here, however, is the International Gas Union. This is the industry group that promotes the global LNG industry.

It puts life-cycle emissions at about 600 kg of carbon per Mwh.

Another interesting element is how the Liquid Natural Gas industry lobby the International Gas Union, sees things differently from other researchers. The IGU has the lowest estimate of greenhouse gas emissions.

With some variations, the above indicates general agreement on the scale of emissions from the LNG trade.

An outlier here, however, is the International Gas Union. This is the industry group that promotes the global LNG industry.

It puts life-cycle emissions at about 600 kg of carbon per Mwh.

Summary Emissions of LNG-Shipped Natural Gas

Low

High

Middle

US Dept. Energy

600

800

700

US Technology Energy Laboratory

575

725

650

Environmental Science & Engineering

600

800

700

International Gas Union

550

650

600

Average

585

715

650

Putting all these numbers together in place indicates a midrange of 575-725, or 650.

That’s a mere one-third reduction from coal and 50% higher than the emissions profile of natural gas combustion alone that the LNG industry universally cites. These figures also do not count methane emissions. Clean energy? It looks a stretch on the numbers.

This matters because the LNG industry has for years used such selective numbers to win regulatory, environmental and investment approval for a massive multi-hundred billion dollar global expansion with an amortization period stretching out to 2040 and beyond.

If this holds, it’s no exaggeration to say that 4c warming by mid-century is not implausible. Warming on that scale puts civilization in peril, all for the profits of a single industry.

Properly carbon priced, natural gas shipped to market as LNG is uncompetitive against wind and solar. In other words, pricing the now-uncounted carbon emissions of the LNG industry would provide sufficient funding to pay for both battery storage for wind and solar as well as climate adaptation investments now required by the lingering legacy of fossil fuels — of which LNG is just the latest incarnation.

Yes, carbon pricing LNG will raise the prices of electricity produced from natural gas. Destructive climate changes and destroyed coastal cities also will cost money. The issue is one of polluter pays.

Thirty-percent when applied to carbon prices will move upward the carbon-adjusted retail price of electricity generated from natural gas shipped to market as LNG. At present, coastal cities and global health care systems are paying these costs through more severe and damaging storms and treating the physical stress of record heat waves.

Paying these pollution costs through an $80 per tonne carbon price in 2030 (for example) would raise LNG-based electricity prices by 5.2c kwh. $100 carbon price will raise it by 6.5c. That would, in some cases, double the downstream cost of electricity generated from this fuel, bringing the cost of carbon adjusted LNG-produced electricity to 8-12c per kwh, compared to less than 5c/kwh in 2030 for wind and solar.

The difference between these two future prices, 5c and 10c is the implicit subsidy the LNG industry is getting.

As this is realized, markets will shift against LNG. Billions of dollars of global LNG infrastructure will prove uneconomic. When that happens, either the LNG industry will lobby government for assistance, or be forced into micro-economically draconian write downs of LNG capacity that never should have been built had prices signals not been distorted through uncounted carbon.

As US President Donald Trump imposes tariffs on Europe and China, and potentially South Korea and Japan later, how might they respond?

Answer: carbon tariffs on US Liquid Natural Gas (LNG) exports.

The crossover price of solar and wind with LNG will happen as soon as 2027 and as late as 2035. The result in either case will be stranding of LNG investments.Source: Bloomber New Enegy Finance, US GAO, World Bank, US EIASources:Carbon Pulse, Synapse, ICIS, US General Accounting Office, Point Carbon

Applying such cabron tariffs would represent the height of sensible economic orthodoxy. Carbon import tariffs will generate funds in gas consuming countries to invest in decarbonizing their economies.

That will allow the carbon tariff money to stay at home and fund domestic economic growth through substituting local energy production in falling price wind and solar energy (plus battery storage) instead of leaching money offshore for imported natural gas.

Given the above, the impact of carbon tariffs would be a single, highly-manageable energy ‘price shock’ in consuming countries that’s long overdue anyway.

This is inevitability anyway. Sometime between the late 2020s and 2030s solar and wind will conclusively become cheaper than natural gas delivered to market as LNG in priced, carbon-adjusted terms.

Preparing for this future by investing in it now will make their economies more resilient and competitive during the 2020s. Relying on fossil fuels, by contrast, will lower their competitivess by driving up their domestic economic production costs through being chain-ganged to natural gas imports when renewables are cheaper.

As natural gas consuming countries, Europe, Japan, South Korea and China have little to lose from taxing carbon.The reason is that they don’t have domestic national natural gas champions to protect. Indeed, the opposite is true: they have much to gain from ridding themselves of carbon dependency.

Buying US natural gas leaches money offshore that could be used to create domestic jobs and build up renewable energy industries.

In Europe, South Korea, Japan and China, that would be wind. All have this resources in abundance.Complementary investment could be made in storage and management of intermittency, now available through batteries from Telsa (to cite one) and smaller stocks of natural gas that would dwindle over time.

What this means is the the US export machine of dirty Liquid Natural Gas is highly vulnerable to being displaced by alternatives. All a US initiated trade war in which trade partners reciprocate through carbon taxing LNG imports does is speed the process.

The US ends up the ultimate loser. If the US returns to rational leadership in 2020, it’s likely a new president will revisit the issue of proper carbon pricing to restore fiscal sanity. As a result, a carbon pricing regime is inevitable on fiscal grounds.

Life-Cycle carbon emissions of 600-700 kgs per mwh result from natural gas electricity delivered to market as LNG.Source: “Life Cycle Greenhouse Gas Perspective On Exporting Liquefied Natural Gas From the United States, 2014,” US Department of Energy

In other words by 2050, the world can have an LNG industry, or a livable planet. The two are mutually exclusive.

The reason for this LNG’s large life-cycle greenhouse gas emissions. Properly costed and applied, these will dismantle the industry. The upside, however, is that pricing carbon emissions will generate the funding for decarbonization of the global economy.

The secret lies in carbon pricing applied holistically across the natural gas LNG supply chain. When this is done, natural gas/LNG’s benefits are exposed as utterly illusory.

To get an appreciation of LNG industry disinformation, consider the two graphs below.

The first, more credible set, is from the US Energy Information Administration The US government posts LNG llfe-cycle emissions asb0.6-0.8, while the industry puts it s at 0.4-0.6. Hmmm

The International Gas Union claims life-cycle carbon emissions of 550-600 kgs per mwh from natural gas electricity delivered to market as LNG.Source: “Life-Cycle Assessment of LNG,” International Gas Union, June 2015

The second set of figures comes from the LNG industry lobby group International Gas Union. Those figures claim LNG’s life-cycle emissions are a third lower than those of the EIA. Odd, that.

What matters to climate change are the total emissions, not just selective parts of the chain. Earth’s atmosphere doesn’t distinguish between the two when it comes to global warming, so debate over fixing the problem shouldn’t distinguish either.

When these emissions become properly priced and traded, they will lead to substitution of higher emission sources for lower emission sources. They will also undermine the business case for LNG, leading to losses among those have made the enormous capital investments in them.

Another reason to better understand the environmental and economic risks posed by LNG is that most LNG facilities are built in sensitive coastal areas.

Big LNG companies commonly engage in government capture of local authorities, for instance in Australia’s Queensland, to bypass environmental protection laws to build big industrial sites in sensitive ecosystems, such as the land bordering the Great Barrier Reef.

In coming years, renewable energy sources such as wind and solar will cost less on a carbon-adjusted life cycle basis than LNG. The need now is to halt investment in damaging LNG infrastructure by revealing the shortcomings the LNG industry likes to conceal.

That’s only about 20-25% less than coal — at huge cost. Solar comes in around 40 kg per megawatthour. Wind comes in around 12.

In short, the fate of the Liquid Natural Gas (LNG) industry will determine whether humanity wins or loses its game of climate roulette.

If carbon pricing expands and prices rise, the world will be propelled toward a cleaner, more prosperous, peaceful future. Done carbon pricing is done badly — or worse — not at all, civilization will come undone.

LNG is a bad technology entrenching itself at the worst possible time. A few simple graphs make the case.

The universal mantra of the $90 billion LNG industry is that LNG is a desirable technology because natural gas is a low emission energy source. That’s disingenuous to the point of being an outright lie.

LNG, narrowly defined, is a $90 billion industry, but that doesn’t include a host of other associated industries.

Donald Trump’s US presidency may push the United States to split into two independent countries.

Donald Trump may be pushing America’s left-leaning and right-leaning states to split.

One could be comprised of 22 of America’s economically and politically progressive coastal, midwestern and mountain states and Hawaii.

It might be called Califowne+, standing for California, Oregon, Washington, the Northeast, plus a few other states.

The other could be comprised of America’s midwestern, plains and mountain states plus Alaska. That one could be calledHomelandia.

California’s planned referendum next year on leaving the 50 state union — known as Calexit — could mark the starting point down this road.

Over the past 40 years, two ideological halves of the United States have grown ever further apart. A split would give greater political coherence to both sides. America’s Declaration of Independence sums up the rationale:

‘In the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, (a) separate and equal station.”

Initially, at least, Homelandia and Califowne+ would start separate lives as rough economic and population equals. Both would be $8-10 trillion economies.

While each would be smaller than China’s economy, each would be double the size of third-tier economies like Japan and Germany.

Splitting the United States into Califowne+ and Homelandia would allow each of the two new nations better internal political and economic focus.
Califowne+, for instance, could develop its economy through an economic ‘comparative advantage’ strategy.

This could be based upon intellectual property, open inquiry, science, reason, trade, development of carbon markets and international political and economic engagement.

This could be based upon closed borders, reduced trade, a primacy of church in state affairs, capital punishment, teaching creationism in schools, open carry gun laws and elimination of background checks, state control of reproductive rights and abolishing limits on carbon emissions.

Markets could do the rest.

Califowne+ could expand and deepen trade and political links with Canada, Mexico, the European Union and China in investing billions of dollars to spur tomorrow’s new intellectual property industries.

High on the list: implementing carbon prices of $50-100 per tonne over the next 10-20 years. This would throw off trillions of dollars for reinvestment in the industries of tomorrow.

This would spur economic growth and enable Califowne+ plus to pay down its $10 trillion share of America’s current national debt, which would be split in half under the divorce.

Homelandia, meanwhile, could either renege on its debt or inflate it away.Homelandia also could impose capital controls, deepen state control of the economy and end external trade using the Argentina model as a blueprint.

Homelandia would in the split gain control over much of former United States’ oil shale and gas reserves.

This would makeHomelandia self-sufficient in energy. And since Homelandia wouldn’t be able to trade those fossil fuels international due to high carbon tariffs, Homelandia could use these stranded resources to remain self-sufficient in energy for decades to come.

Next year’s 2018 mid-term US elections and the proposed ‘Calexit’ vote will provide initial clues on the potential for the outcome laid out above. The 2020 presidential elections will be critical as well.

If the United States is now a chain-ganged coupling of incompatible subnations, splitting the two in half could enable both sides to thrive.

Seventeen states may be all that lies between saving America as a single nation or having it disintegrate.

Climate change action at America’s state level — as demonstrated by the Governors’ Accord for a New Energy Future (GANEF) may be one of the few political issues able to unite some of America’s polarized states across the red-blue Republican-Democrat political divide.

The critical issue is the conflict between fossil fuels and clean energy.

It represents the pinnacle of the nation’s progressive-conservative culture wars. These began with abortion and have climaxed with climate change.

On one side lies the conservative American interior states. Heavily influenced by churches and fossil fuel energy companies. Many of these live by litmus tests of faith such as decrying global warming as a hoax and birth control as damnation.

On the other side exist coastal secular states influenced by America’s best higher education institutions. These populations largely agree with the scientific consensus global warming is real. They further agree renewable energy is an economic opportunity and issues such as birth control are individual, not collective, choices.

Going against the grain of this worsening national political divide, 17 states ranging from the most backwardly conservative (Iowa) to the most forwardly progressive (California) have agreed to swim againstthe ugly tide of violent right-wing populism.

They have agreed to work together at the state level to move toward environmental sustainability.

While falling short of agreeing to a 100% renewable energy manifesto, the states all endorsed the goal of improving energy efficiency, refurbishing electricity grids and encouraging renewable energy among other good ideas.

During the thuggish Trump years ahead such left-right voices of reason may be what saves the American union from breaking up as the more progressive Pacific and Atlantic coastal states consider seceding and potentially join Canada.

The worst case could happen as early as 2018, when California’s voters will consider a secession referendum. Depending on the margin of victory in the referendum, should it occur — it could set the nation on a long-term path toward breakup.

The best outcome, however, would be for the angry right demographic created and fed first by Rupert Murdoch and then by fake news entrepreneurs like Breitbart News to realize the Pandora’s Box that’s been created by winding up the ill-informed in order to sell advertising.

Should America disintegrate due to this, the returns to ‘grievance media’ enterprises would collapse, along with international political stability.

That, in turn, is what makes the ‘Governor’s Accord for a New Energy Future’perhaps the brightest development in a dark overall picture. The accord is an agreement by 17 American states that span the nationalpolitical divide to move toward a green economy.

The states include left leaning California and New York, but also rightward leaning states like Michigan and Virginia.

Handled correctly, implementation of the Accord could create a constructive political realignment based upon grasping the business opportunity of decarbonization.

As the American economy improves and jobs in the interior are created through moving beyond carbon, the political divide between the heartland the coasts may narrow.

As this occurs, the United States might once again become outward looking instead of inwardly obssessed. This would benefit everyone.

In the early 20th Century, American isolationism brought the country little and helped either foster or prolong two World Wars. International engagement by the United States after World War II, by contrast, brought the US widely-admired global leadership for nearly half a century.

America can regain this leadership by, at first, healing its internal divisions using clean energy as the paltofrm.

As prices converge through deeper linkages among the above, it would further drive economic integration between Canada, the US and Mexico, making the three a stronger regional economic unit. This in turn could help pull the global economy upward.

As political polarization lessens and rational minds grow more influential, the United States could even consider moving back to implementing a future version of the media ‘fairness doctrine.’

This requires media outlets to present both sides of political issues to ensure balance.

Hydrogen is the signal. LNG is the noise. Smart minds will follow the signal.

New ways to create hydrogen keep getting discovered:coal to hydrogen, sewage-to-hydrogen, solar-to-hydrogen. With each new innovation, the long-term economics tilt towardH, or hydrogen.

Perhaps most significant, hydrogen-powered electricity is now competitive with nuclear, LNG and coal in carbon and risk-adjusted terms (ie against nuclear).

These shifting price dynamics still have a long way to go. They’ll change everything. The leading edge of this revolution is in Japan.

Start with Tokyo’s 2020 ‘Hydrogen Olympics.’ During the games, Japan plans to poweras much of the games as possible– from transport to accommodation —using hydrogen.

Tokyo also has one of the world’s best designed and functioning carbon markets. While it still covers only municipal emissions, prices are now up above $30 per tonne — among the world’s highest.

The market has enabled Tokyo to reduce its carbon emissions by a quarter in the six years since it was created in 2010..

The biggest development, however, is Japan’s plans to begin small scale-imports to Japan by tanker of Australian carbon capture and storage produced hydrogen.

This is a potential major game changer for the global energy industry. If successful, it will rank right up there with Japan’s pioneering of the global LNG age during the 1970s oil crises.

By the mid 2020s, for example, Kawasaki Heavy Industries plans to begin importing brown coal fired, carbon-capture-and-storage produced hydrogen from Australia’s state of Victoria to the southern Japanese port city of Kobe.

Kobe, which already produces hydrogen from sewage, aims to power ever more of the city with hydrogen, with domestic wind-produced hydrogen eventually supplanting hydrogen imports.

Over time, natural gas pipelines will be repurposed to carrying both natural gas and hydrogen, eventually shifting exclusively to hydrogen by mid-century, or earlier.